SC reverses its earlier ruling and nods initiation of prosecution on successive dishonour of cheque

In the instant case, the respondent-company issued some cheques in favour of the appellant which were dishonored twice for insufficiency of funds. The appellant presented the issue before the Metropolitan Magistrate. During proceedings, the respondent contended that complaint had not been filed within 30 days of the expiry of the notice based on the first dishonour of the cheque. The Magistrate dismissed the application of respondent. On filing of revision petition before the High Court, it allowed the revision petition and quashed the orders passed by the Magistrate relying upon the decision of the Supreme Court in Sadanandan Bhadran v. Madhavan Sunil Kumar [1998] 6 SCC 514, according to which a complaint based on a second or successive dishonour of the cheque was not maintainable, if no complaint based on an earlier dishonour of cheque, followed by the statutory notice issued on the basis thereof, had been filed. Matter reached to the Supreme Court.

The Supreme Court held in favour of appellant as under:

1) Holder or payee of the cheque has the right to present the same any number of times for encashment during period of six months or during period of its validity, whichever is earlier: Even Sadanandan Bhadran's case (supra) upheld the same;

2) There is nothing in provisions of Act that forbids holder of a cheque to demand amount covered by cheque, by serving fresh notice under clause (b) of proviso to section 138, should there be a second or successive dishonour of cheque on its presentation;

3) So long as the cheque is valid and it is dishonored upon presentation to the bank, the holder's right to prosecute the drawer remains valid and exercisable;

4) By reason of a fresh presentation of a cheque followed by a fresh notice in terms of section 138, the drawer gets an extended period to make the payment and thereby benefits in terms of further opportunity to pay to avoid prosecution. Such fresh opportunity cannot help the defaulter on any juristic principle to get a complete relief from prosecution;

5) There is no real or qualitative difference between a case where default is committed and prosecution immediately launched and another where prosecution is deferred till cheque presented again gets dishonored.

Thus, the decision in Sadanandan Bhadran's case (supra) was overruled and it was held that prosecution based upon second or successive dishonour of the cheque was also permissible so long as the same satisfies the requirements stipulated in the proviso to section 138 - MSR Leathers v. S. Palaniappan [2012] 26 taxmann.com 332 (SC)

US Court hails Rajat Gupta’s ‘big heart and helping hand’ but jails him for insider trading

Rajat Gupta was the director of Goldman Sachs. He was privy to information which would affect company’s share prices but not known to public. Gupta was found guilty by the jury for insider trading i.e. for leaking some unpublished price sensitive information in 2008. Gupta tipped off Rajaratnam about Warren Buffett’s soon-to-be-announced infusion of $5 billion into Goldman Sachs. Rajaratnam purchased large quantities of Goldman stock just before the market closed and booked a gain of $1,231,630 by selling the stock next morning when the Buffett investment was announced and stock prices surged. The crimes merited a prison sentence of 78-97 months under the Sentencing Guidelines of the US. Given Gupta’s exemplary humanitarian record, the US District Court of New York let him off with a ‘non-Guidelines’ sentence of 2 years prison.

The Court noted Gupta’s devotion of a huge amount of time and effort to a very wide variety of socially beneficial activities, such as the Global Fund to Fight AIDS, TB and Malaria, the Public Health Foundation of India etc. Such activities were illustrations of his big heart and helping hand. The Court hailed Gupta’s “extraordinary devotion, not only to humanity writ large, but also to individual human beings in their times of need”.

On the other hand, Gupta's criminal acts represented the very antithesis of his humanitarian record. With Goldman Sachs in turmoil but on the verge of being rescued by an infusion of $5 billion, Gupta, within minutes of hearing of the transaction, tipped Rajaratnam, so that the latter could trade on this information in the last few minutes before the market closed. This was the functional equivalent of stabbing Goldman in the back.

The Court had to balance both extremes while awarding a sentence to Mr. Gupta. Taking Court observed that “meaningful punishment is still necessary to reaffirm society's deep-seated need to see justice triumphant. No sentence of probation, or anything close to it, could serve this purpose.”

The Court took note of the provisions of the United States Code which require that the Court had to consider the need to afford specific deterrence and general deterrence. As to specific deterrence (i.e. deterring the convict repeating it in future), the Court held that loss of reputation suffered by Mr. Gupta would deter him from repeating his transgressions in future and no further punishment is needed to achieve this result. The need for general deterrence (i.e. to set an example to others), however, suggested different conclusion. Insider trading is an easy crime to commit but a difficult crime to catch. It was necessary to send out the message “when you get caught, you will go to jail”. After carefully weighing the above, the Court sentenced Rajat Gupta to 24 months' imprisonment, concurrent on all counts, to be followed by one year of supervised release and a fine of $5,000,000.

Indians need not despair that, unlike US, legal system moves slowly in India. Two recent instances offer rays of hope. One, the death sentence of Ajmal Kasab for terrorist acts on 26-11-2008 upheld by the Supreme Court in 2012. The other being two Sahara companies found guilty by the Supreme Court of public issue of securities (Optionally Fully Convertible Debentures) in the garb of private placement in 2008. Companies ordered to refund amounts collected from public. This whole case was successfully handled by SEBI, Securities Appellate Tribunal and the Supreme Court in two years flat from 2010 to 2012.

Income Tax Calculator-A Necessity

Everybody is aware of the word income tax. Each country has a rule of its own in terms of income tax calculations. In the modern times a person can easily calculate his or her income tax through the help of income tax calculator . There are several websites which has the programme of tax calculator. Speaking about India, the tax levels have increased from the year of 1950. During 1971 there were a total of 11 slabs in tax where the maximum tax rate was 93.5 % which included the surcharges. During 1974 the maximum rate was 97.5 %. The tax was then reduced due to the income tax circulars as the tax evasion was increasing. The tax rate was then decreased to 40 % during 1993.

The income of a person when does not exceed a certain level is not liable to tax is an asset. It becomes chargeable under the income tax. The rates are agreed by the income tax circulars and finance acts in a given assessment year and is determined according to a person’s residential status. Thus this tax is the tax which is payable at a rate which is enacted by Union Budget, every year on the basis of total income which is earned by each and every person in the preceding year. The charge is completely based upon the type of income of a person. Be it a capital or be it revenue. The educational cess becomes applicable at the rate of 3 & over the income tax of the person. The surcharge is not applicable.

Residential status also becomes necessary which is clearly stated clearly in the income tax circulars. There are basically 3 status of the residentially. The first one is for the ordinary residents. Under this, the person must reside in India for minimum 182 days in the previous year or must have a stay in India for 365 days in the last 4 years in the previous year. The regular residents are taxable always on their respective income which is earned in India as well as in the abroad. If the income of the non residential Indian is acquired from any kind of trade or business which is headquartered in India they are compelled to give a small amount of tax.

Basically the complete income of a resident is separated into 5 major parts. The first part is the income from the salary; the second can be attributed to the money coming from house property. The third one is the income which is generated from any profession or business of the person, the fourth one is in the form of capital gain and lastly there is the income from various other sources. The income tax circulars gives all the details regarding the rules and regulations and the tax calculator comes into handy which can be used by many to know the exact amount which must be given to the government.

Great tax calculation services available online

The tax calculation is one of the most vital things in your life, as you surely need to pay tax after calculating how much you can save legally. The Service tax for instance is something that you pay yearly, but if you are not aware of the Income tax act properly then you won’t be able to know how much you can actually claim for refund. That’s exactly why you need professional services which can work on the Income tax act and find you ways to save on Service tax as much as possible for you. This is one thing that has made calculating tax with professional services a popular option. The online tax calculation services can help for sure.

When you are looking for the tax calculation service you have to make sure that you select a trustworthy service that has the right experience of the job. The Service tax payment will become just a matter of few mouse clicks with these services, and your refund will be credited to your account. All you need to do is to register with the service and they will work according to the Income tax act and make sure that your tax is submitted in time, with proper tax exemption claims.

Accessing Service Tax Rules, now easier with Taxmann.com

Paying taxes and understanding Service Tax Rules is a complicated task for many of us and more so with the many amendments and Service Tax Circulars that the department comes up with everyday. However, to make the process of filing taxes a lot easier for the citizens there are many online tax calculator services available.

These services use the information being entered by the user about their sources of income and the claimable deductions after which the tax calculator sums up and provides an accurate figure. This process of filing my taxes was a pain and a waste of time taking into consideration the long hours one has to spend with the auditors or online trying to understand the requirements and fill up the required details and avoid any errors. However, this was so only until a friend of mine suggested me to look up the website of the Taxmann.com that offers all kinds of services pertaining to taxes.

This apart the website also has its content sorted out neatly for people looking for additional information about the Service Tax Circulars, Service Tax Rules etc making the site helpful and informative along with being easily accessible to everybody.

How tax adviser help for current income tax rules

Let’s put it this way. I am pretty baffled and confused about Income tax rules . So, the other day I sought an appointment with a tax consultant to understand the norms and implication. What I got to understand that the tax implication is a part and parcel of life. It is equally baffling for me to understand how people make their way easily through the mesh of income tax rules. That too they are pretty adept at handling the intricacies all by themselves. Despite my confusion, I do realize their overwhelming significance. Moreover, the tax consultant is too eager to help me through the deals of calculations.

The bracket of taxation varies from individual to individual. But, as long as you belong to the bare optimum tax bracket, you cannot avoid the bills of taxation. Income tax rules change with the passage of time. This again is done, keeping in mind the interests of one and all. Consequently, it is common to come across a new Income tax act . It is quite important for tax consultants, as well as the payers, to gather factual evidence about the newly passed income tax act. Last time, my consultant briefed me about the implications of service tax notifications.

He further explained how we indirectly contribute to Service tax notifications , despite not being the owner of a service. Entrepreneurs, business houses, as well as, the tax counselors need to be well aware of service tax notifications. Tax consultants have leading roles to offer in helping people like me deal with the prospect of disbursement. Income tax act revised from time to time has to be within their fingertips.

Tax Computation & e-Filing of Income Tax Returns

Tax Computation & e-Filling of Income-tax Returns’ are covering:

*  Computation of income under different heads of Income, i.e., Salary , House Property , Business or profession , Capital gains and Other sources
*  Relief under section 89
*  Auto computation under sections 80G, 111A, 112 etc.
*  Auto adjustment of losses & transfer thereof in schedules CYLA / BFLA / CFL
*  Computation of interest under section 234A, 234B & 234 C
*  Facility to auto generate Tax Audit Forms (i.e, 3 CA to 3 CD)
*  Computation of book profits & MAT
* Instant location and solution to validation errors
*  Facility to generate paper returns

Let Us Share A Compilation Of Best Practices & Orders

We are pleased to announce release of “Let Us Share-A Compilation of Best Practices and Orders, by Income Tax Department.

Let Us Share” was conceived three years ago, as a vehicle for sharing excellance both within the Income-tax Department and with the public. The compilation in “Let Us Share” starts with Vision, Mission & Values’ and the ‘Citizen’s Charter’ which signify the reference points for day to day working of the Income-tax Department. The remaining sections showcase the professional proficiency of the Department in the core area of taxation.

E-TDS Returns (F.Y 2012 -13)

E-TDS Returns (F.Y 2012 -13) Some of the salient features are
  * Unlimited Deductors / Companies, Deductee & Employee
  * Generates eTDS / eTCS Return for Forms 24Q, 26Q, 27Q & 27EQ
  * Generates NIL returns on a single key stroke
  * TDS/TCS Certificate – Forms 16, 16A, 27A & 27D
  Latest Integrated File Validation Utility (FVU) of NSDL for automatic data Validation
  * FVU file generation for Return submission in just on click
  * Instant display of file validation errors at same location
  Option to auto download CSI file during file validation
  Import data from Excel files (optional add-on)
  Online / Offline updation , data backup & restore facilities   Print out various utility reports
  Print out Forms 24Q, 26Q, 27Q & 27EQ for internal records
  * Option of Exporting reports in PDF/ Word/ Excel formats
  Extremely user-friendly Windows based interface.

Taxmann’s Guide to Foreign Direct Investments in India with FDI Policy Effective From 10th April, 2012

Taxmann’s Guide to Foreign Direct Investments In India is a complete and comprehensive Guide to Consolidated FDI Policy issued on 10th April, 2012. 

Liberalisation in industrial policy and policy towards foreign investment in India was initiated in 1991.  The liberal policies introduced in 1991 are continuing and Indian economy is becoming more and more open and liberal every year.

Policy in respect to foreign investment in India (FDI) is regulated by Department of Industrial Policy and Promotion (DIPP) (FC section).  So far, the practice followed was to issue press notes in respect of industrial  and foreign investment policy.  The press notes were scattered and a single policy document was not available.